If you follow these steps before you call a mortgage lender you will be prepared to shop for the best loan for your circumstan

If you follow these steps before you call a mortgage lender you will be prepared to shop for the best loan for your circumstances with the least amount of hassles.

 

  1. Know your FICO. What’s a FICO? It’s your credit score and mortgage rates are dependant on them. If you don’t know what’s in your credit reports, it’s time to find out. Credit reporting agencies are now required to give you a free credit file disclosure annually. To request your free report go to AnnualCreditReport.com., call 1-877-322-8228 or write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The report is free and you can purchase your credit score for a small charge. Another resources in myFICO.com where you’ll find a free booklet explaining FICO scores and a FICO Score Simulator that answers questions like “What happens to my score if I pay off a credit card or . . . ?”

 

  1. Review your credit report. Credit reporting companies can make errors; carefully look over your report. Keep written records of correspondence and keep receipts of paid debts. You may also want to pay down accounts that are near their limits.

 

  1. Gather financial data. You can quicken the loan application process by having all documents ready. You’ll need: IRS W-2 forms for the previous two years, pay stubs for the most recent 30 days, three months bank statements including ending balances and all transactions. You may also need tax returns, lease agreements on rental properties and records of commissions, child support or other income.

 

  1. Set goals. How much down payment do you have? Do you need to increase savings? How long do you plan to stay in your new home? Do you expect new financial obligations in the next few years such as a change in work hours or a new baby? Also consider what monthly payment you are comfortable with. Do you want the maximum you can qualify for, or is a smaller amount appropriate for your lifestyle? Answers to these questions will help you and your loan consultant determine what loan is best for you.

 

© Barbara Koshar 2005